1. At a Glance
India’s cotton gin king just posted a profit of ₹7.4 Cr in Q1 FY26 — down 52% YoY. Sales shrank 24%. Stock’s down from ₹988 to ₹643. Yet, return metrics are surprisingly solid, with ROCE at 21.1%. The question: is this a growth pause or just a classic case of monsoon blues?
2. Introduction with Hook
Picture this: A company that makes machines to gin cotton and press bales like they’re contestants in a gym contest. Now imagine that same company turning in a quarterly profit fall that’d make a CEO sweat harder than a seed in a decorticator.
- PAT YoY fall: -52%
- Q1 FY26 Sales: ₹107.5 Cr, down from ₹141 Cr YoY
Basically: Margins holding strong, but the topline just dropped the dumbbells.
3. Business Model (WTF Do They Even Do?)
Bajaj Steel Industries is the Rural Terminator of India’s cotton belt.
- They make ginning and pressing machines — the kind that turn fluffy cotton into compact bales faster than your CA turns tax-saving tips into Excel
- Also make seed processing equipment, electrical panels, and do fabrication
The company basically runs every engineering department you ignored in college.
4. Financials Overview
| Metric | FY25 | FY24 | YoY Growth |
|---|---|---|---|
| Revenue | ₹585 Cr | ₹551 Cr | 6.2% |
| EBITDA | ₹92 Cr | ₹81 Cr | 13.6% |
| PAT | ₹84 Cr | ₹59 Cr | 42.3% |
| OPM | 15.75% | 14.7% | +1.05% |
| ROE | 17.9% | 18% | Flat-ish |
Commentary: Profits are trying to shine, but sales look like they’re stuck in neutral.
5. Valuation
Let’s torque the valuation bolts:
- P/E: 23.6x
- Book Value: ₹186 → P/BV = 3.45x
- EV/EBITDA: ~11x (est.)
Fair Value Estimate:
- P/E-based (14–18x): ₹470–₹600
- EV/EBITDA-based (9–12x): ₹450–₹580
- FV Range: ₹460–₹590
Verdict: Priced like an old tractor with new tires — not cheap, but won’t leave you stranded either.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: Sales down, PAT crushed. Blame it on weak order flow and cyclical delays
- Appointment of Independent Director: Mayank Bhandari steps in. No drama, no fireworks
- Investor PPT Dropped: And it wasn’t Comic Sans, so that’s a win
- Cotton Prices & Demand: The real driver for machinery biz, and it’s not humming yet
- Bonus Drama? Nah. Not this season
7. Balance Sheet
| Item | FY25 |
|---|---|
| Total Assets | ₹604 Cr |
| Reserves | ₹377 Cr |
| Borrowings | ₹65 Cr |
| Fixed Assets | ₹175 Cr |
Takeaway: Financially solid, but working capital’s getting bloated like a dhokla in the rains.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY24 | ₹55 Cr | ₹-66 Cr | ₹19 Cr | ₹8 Cr |
| FY25 | ₹52 Cr | ₹-38 Cr | ₹-26 Cr | ₹-12 Cr |
Observation: Positive CFO is nice. But they keep spending like it’s Diwali season at a mall.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 21.1% |
| ROE | 17.9% |
| PAT Margin | ~14% |
| D/E | 0.17 |
| Inventory Days | 197 (Yes, really) |
Verdict: Inventory days longer than your in-laws’ stay. Needs detox.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹549 Cr | ₹92 Cr | ₹68 Cr |
| FY24 | ₹551 Cr | ₹81 Cr | ₹59 Cr |
| FY25 | ₹585 Cr | ₹92 Cr | ₹84 Cr |
Hot Take: Flat topline, but net profits working overtime. Like your boss taking credit for your deck.
11. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E | ROE |
|---|---|---|---|---|
| Kaynes Tech | ₹2,722 | ₹293 | 131x | 11% |
| Syrma SGS | ₹3,571 | ₹202 | 62x | 10% |
| Bajaj Steel | ₹551 | ₹84 | 24x | 18% |
Punchline: In a room full of overpriced tech bros, Bajaj’s steel is still grounded — and profitable.
12. Miscellaneous – Shareholding, Promoters
| Holder | Mar 2024 | Jun 2025 |
|---|---|---|
| Promoters | 48.27% | 48.27% |
| FII | 0.07% | 0.15% |
| DII | 0.08% | 0.01% |
| Public | 51.58% | 51.59% |
- Promoters slowly creeping up stake
- FIIs: still not convinced
- DIIs: blinked and left
Basically, still a retail battlefield.
13. EduInvesting Verdict™
Bajaj Steel Industries isn’t here to break the internet — it’s here to press cotton, collect margins, and occasionally surprise you with a 40% profit spike.
But sales stagnation, working capital stress, and erratic quarterly profits mean: this stock isn’t a “sip and forget” kind. It’s a “check the engine every few miles” type.
Verdict: A sturdy machine in a cyclical lane.
Not a rollercoaster, but expect a few speed bumps.
Metadata:
Written by EduInvesting Team | 23 July 2025
Tags: Bajaj Steel Industries, Q1 FY26, Cotton Machinery, EduInvesting Premium
